Up-to-the-minute advice, information, resources, and, on occasion, commentary on federal and New Jersey state income taxes, and the various New Jersey property tax rebate programs, and insights and observations on tax policy and professional tax practice, by 40-year veteran tax professional Robert D Flach.

Wednesday, September 1, 2010

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ – WEDNESDAY EDITION

THE BUZZ IS BACK!

* The IRS Summertime Tax Tip 2010-22 “Eight Things to Know If You Receive an IRS Notice” has some good information. Perhaps the best advice one can give regarding an IRS, or state tax authority, notice, which is not on the IRS list, is to give the notice to your tax preparer immediately.

“When it comes to putting off assignments, college students have nothing on Congress.

Case in point: Lawmakers have yet to decide the fate of more than 100 tax breaks that either already expired at the end of 2009 or will expire by the end of this year.”

I agree with Jeanne when she says -

“Since it's a major election year in Washington, with hundreds of lawmakers trying to hold on to their seats, it's possible that many of the tax measures won't be decided until after Nov. 2 by a lame-duck Congress.”

I hope the IRS is thinking along the same lines and holds off going to press with the 2010 tax forms.

“At the same time the IRS is moving forward with enhanced regulatory oversight of return preparers, Congress continues to debate whether to make competency testing and continuing education for unenrolled preparers required by law. The Taxpayer Bill of Rights Bill of 2010 (Sen 3215) would mandate competency testing and CPE for unenrolled preparers. Similar legislation (HR 5047) has been introduced in the House.”

If the mew regulatory regime is going to be part of a federal law, then here is where the testing and requiring of mandatory CPE in federal taxation can be extended to CPAs and attorneys. But don’t count on it – the AICPA and ABA have tons of money to spread around on the hill.

* The tax blogosphere has been buzzing about California Attorney General Jerry Brown’s lawsuit against Roni Deutch for “pulling an H+R Block” and screwing her tax debt resolution clients. Click here for the AG’s press release.

I do not know Roni personally, nor did I, or any clients or friends, ever have any dealings with her firm – so I cannot comment on the accusations. In the past she has linked to TWTP posts as “good reads” at TAX LADY and I have, on occasion, included posts from her blogs as items of interest in BUZZ installments. And her publicist sent me a free copy of her book, which I have still to read, a while back.

What pretty much all of the posts say, and correctly so, is that nobody can promise those of you with substantial outstanding federal tax balances that by using their service you will pay “pennies on the dollar”. It just ain’t so – and you can take that to the bank!

“So, no vast conspiracy. No targeting bloggers. And no plan to try and silence free speech. No one was sitting around the Revenue Department searching online for Philadelphia bloggers. The City was acting on information that it got from the feds, something it does all of the time. It’s part of the normal information sharing that goes on (oh yeah, and states share information as between each other and the feds, too). A key difference this time was the scale of the notices and the speed at which information – even bad information – travels these days.”

Kelly hits the nail on the head, as she usually does, with her bottom line (the highlight is mine) -

“What’s really wrong with the City isn’t a $300 license for businesses – it’s just become a convenient scapegoat for a much more serious problem. We have a tax system that’s confusing and a bureaucracy that is out of control. And I dare say, that’s not restricted to Philly.”

In discussing the good, the bad and the ugly of the internet she rightfully points out, under bad, that –

“Unfortunately because anyone with a computer and Google can now see the various stages of the Bills, there is a lot of misinformation and just plain wrong and dangerous information floating around about {tax – RDF} bills.”

Her bottom line to the bad section is something to remember when wandering the internet –

“The morale of all of this: Make sure the person who wrote the article is the one publishing it. If they aren’t, check back to the source. When was it originally written and if it comes to taxes, is it written by a true expert?”

The item discusses the disturbing fact that 15 million American households, representing about 10 percent of all taxpayers, receive more cash from the IRS than they contribute in federal income taxes and employment taxes. Thompson calls them the “Freeloading Fifteen”.

A agree with Derek when he ways –

“The way I see it, it does bother me that 10 percent of American families contribute net zero to the federal government even as they can vote on expensive programs to which they won't contribute, whether it's foreign wars or domestic entitlements. At the very least, it strikes me as an awkward civic deficiency.”

For some time now I have been saying there should be a true “minimum tax” of at least $100.00.

* I love this comment from Professor Nellen in “Stop Studying and Act” at her 21st CENTURY TAXATION blog. It is apparently one of 5 recommendation she had previously sent to PERAB -

“#5. Stop studying and act. Our tax system has been the subject of many studies by government agencies, academics, think tanks, and federal tax reform commissions. Many of those reports describe weaknesses of the federal tax system and offer proposals for improvement. The reports address complexity, the tax gap, depreciation, penalties, global competitiveness, corporate integration, worker classification, and more. The most comprehensive and objective of them should be reviewed and used by the task force. Rather than continually studying the tax system, it is time to improve it."

Right on, Professor!

* Let’s end this installment of the BUZZ with some “Tax Humor” (mixed with good advice) from the TAX RESOLUTION UNIVERSITY.

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